National Australia Bank Ltd (ASX: NAB) shares are having a tough start to the week.
In morning trade, the big four bank's shares dropped 3% to a 52-week low of $35.48.
This means that its shares are now down almost 30% from their 52-week high of $49.45.
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Should investors buy NAB shares at a 52-week low?
Unfortunately, one investment solutions advisory company isn't recommending investors to buy the dip with NAB shares.
According to MPC Markets, courtesy of The Bull, its team is bearish on NAB shares because it believes the bank's near-term earnings outlook is under pressure.
While MPC Markets acknowledges that the bank's dividend is attractive, it has concerns over valuation support if earnings momentum continues to soften. And given that it believes margin pressure challenges will continue, the outlook isn't overly positive. It explains:
NAB remains a quality banking franchise, but the near term earnings outlook is under pressure. The bank's first half net profit in fiscal year 2026 missed analyst expectations, with bad debt provisions and one-off charges weighing on the result. The dividend remains attractive, but valuation support looks less convincing if earnings momentum continues to soften.
In our view, the bank faces the challenges of margin pressure, higher credit risk and slower profit growth. We prefer to reduce exposure and direct capital towards stronger growth opportunities elsewhere.
Are there any bulls?
The good news is that not everyone is as bearish on NAB shares.
In fact, last month, the team at UBS put a buy rating on the bank's shares with a lofty price target of $48.50.
Based on its current share price, this implies potential upside of over 35% for investors between now and this time next year.
And with consensus estimates predicting fully franked dividends of $1.70 per share for FY 2026 and FY 2027, this implies potential dividend yields in the region of 4.8% for both years.
So, if UBS is on the money with its recommendation, this would mean a total potential return in the region of 40% for investors.
Elsewhere, the team at Macquarie has a neutral rating and $39.00 price target on its shares, Citi recently put a neutral rating and $37.40 price target on them, and Ord Minnett has a hold rating and $37.00 price target on them.
